KOCHI: The enforcement directorate (ED) has registered a case under the Foreign Exchange Management Act (FEMA) against Reporter Broadcasting Company over alleged violations in the remittance of around Rs 126 crore to overseas entities in connection with a proposed event in the state featuring football star Lionel Messi and the Argentina national team.
According to ED sources, the agency initiated the proceedings after its preliminary financial inquiry indicated that substantial amounts were transferred to foreign bank accounts, citing business agreements and arrangements related to the proposed event.
The proposed football event, however, did not materialise. Reporter Broadcasting Company — the event sponsor — allegedly transferred around Rs 126 crore to foreign entities, purportedly towards securing contracts and making logistical arrangements for the visit of Messi and the Argentina team, the sources said.
The ED is examining whether the overseas remittances complied with RBI regulations and whether the transactions had a genuine underlying commercial purpose. Sources said preliminary scrutiny has raised questions over the nature of the transactions and the entities that ultimately received the funds. The agency has collected contractual documents and details of the financial transactions.
ED examining whether transactions indicate any other irregularities
Kochi: The documents obtained during the inquiry reportedly show that the funds were remitted abroad through the State Bank of India (SBI), sources said. Violation of FEMA provisions is primarily dealt with through monetary penalties.
However, the ED is also examining whether the transactions indicate any other financial irregularities that could attract criminal proceedings. Sources said a PMLA investigation could be initiated if a scheduled offence is registered by a competent investigating agency in connection with the alleged financial irregularities.
Such a development could provide the basis for the ED to examine the proceeds of the alleged offence under the Prevention of Money Laundering Act, they added.